Industry news
Things I noticed and thought were interesting
Week ending 4th October 2020
1, Trade in hydrogen. The lightest gas is often presented as a means of countries securing energy self-sufficiency. However several projects have been announced in the last weeks that link countries that are likely to export cheap H2 with those that will need to import. Portugal, with strong solar power potential, signed up the Netherlands as a customer for hydrogen. Saudi Arabia made its first shipment of ‘blue’ ammonia - a way of transporting hydrogen - to Japan. Germany signed a research partnership with Australia covering the development of an H2 supply chain while a new project in Spain is targeting exports to the hydrogen centre in Rotterdam. For countries with abundant wind or solar, such as Scotland, the opportunities are strikingly large.
2, Floating wind. Construction began on the world’s largest floating wind farm. The eleven 8 MW turbines will provide a third of the energy required for five offshore oil platforms in the Norwegian North Sea. Equinor, the developer, says that the farm will have costs about 40% below the pioneering Hywind development off Scotland that was constructed in 2017. My rough calculation is that the new site will still be about 50% more expensive to construct than a fixed foundation farm in the North Sea. However one industry source says that ‘Equinor’s ambition is for floating offshore wind to be competitive with other forms of energy by 2030’. Floating turbines are likely to be needed in all waters deeper than about 50 metres, implying that 80% of the world’s addressable wind resources will require this approach. A new venture off the coast of Scotland said it would use a 2 MW floating turbine to make hydrogen offshore which will then be piped to the city of Aberdeen. It is probably cheaper to put hydrogen into a pipeline than run a cable.
3, Imposing ‘net zero’ on suppliers. The last weeks have seen several announcements by large institutions that they will be obliging their suppliers to move towards net zero by a specific date. The UK’s National Health Service joined this group, stating a target of 2030 for ceasing to buy products and services from businesses that don't use renewable electricity. I was surprised by the significance of this promise; the NHS is responsible for up to 5% of UK emissions and its suppliers account for fully 40% of this total. Embedded in pharmaceuticals alone are 1% of national greenhouse gases. The NHS push towards supplier decarbonisation is already matched by some drugs companies that are supplying it. Novo Nordisk, a major diabetes drug supplier, also recently required all its 60,000 sources of supply to begin using renewable electricity by 2030. A doctor I talked to reminded me of some of the clinical complexities of the NHS's wider net zero pledge saying, for example, that many inhalers (for asthma etc.) use global warming HFCs but were regarded as more clinically effective than those using other propellents.
4, Cement decarbonisation. Cemex, the multinational cement supplier, said last week that it was working on carbon capture with CarbonClean. This week, it partnered with the innovative Swiss company Synhelion to make synthetic fuels from the CO2 generated in cement manufacture. Synhelion’s particular strength is the generation of extremely high temperature heat using the sun’s energy. This heat will be used in the cement making process and the carbon dioxide driven off will be captured and then used to make synthetic fuels with renewable hydrogen. One of the unusual features of this circular technology is that it can be used to create hydrocarbons, such as diesel, as well as fuels containing oxygen, such as methanol. The Synhelion technology is still early-stage and, although it looks very compelling, much remains to be proved.
5, Hydrogen for steel manufacture. I think this may be the first project in the US to begin the decarbonisation of steel production. The Department of Energy gave $6m to a university to set up a prototype of a high temperature electrolysis process that will produce the hydrogen that will strip the oxygen from iron ore, leaving just the metal. (‘Direct reduction’ of ore). The university scientists claim that their process will be easier to integrate into full scale manufacturing than the methods used at SSAB in northern Sweden, the world’s leader in the use of hydrogen for steel-making. The scientists also say that their method will be almost 30% more energy efficient than using coal. The importance of this is that in some parts of the world steel-making will require very significant amounts of extra electricity so efficiency does matter.
6, Green chemicals. Siemens and specialty chemicals producer Evonik said a pilot plant had opened which will generate useful products from bacteria that consume carbon monoxide and hydrogen. If successful this plant will demonstrate a route to making green plastics and other high value chemicals such as food supplements. This partnership is an important trial of whether biological routes can be a financially viable route to making complex hydrocarbons, as opposed to using conventional chemical processes such as Fischer Tropsch synthesis.
7, Honda withdraws from Formula 1. Perhaps this has purely symbolic significance, but Honda announced it will withdraw from providing Formula 1 engines, leaving Mercedes even more dominant. What was most interesting was the statement from the Honda CEO that ‘this is not a result of the coronavirus pandemic but because of our longer-term carbon-free goal’. The announcement came a few weeks before the launch of Honda’s first all-electric mass-produced car. This is part of the switch among car manufacturers to focusing almost all R&D on battery or fuel cell vehicles.
8, Volume targets for sustainable aviation fuel (SAF). More countries are moving towards setting (small) percentage targets for the percentage of SAF used in aircraft. Norway already requires 0.5%. Germany introduced a demand for 2% by 2030 and it also pushed this week for a block on the use of biological sources for aviation fuel, such as organic wastes or palm oil because of the impact on food availability and deforestation. But in France Total said this week that it would switch an existing oil refinery to making biofuels form organic material in order to meet France’s 2% SAF target by 2025. The hard reality is that aviation’s needs cannot conceivably be met by using the limited volume of organic wastes. SAF is going to have to come from fully synthetic manufacturing processes using renewable hydrogen.
9, Battery costs and technologies. Tesla appears to have started using Lithium Iron Phosphate batteries in its Chinese factory. These contain no cobalt, avoiding one of the major issues with battery supply. This has surprised some observers who comment that the energy density of these batteries is typically substantially lower than standard lithium ion, meaning that the range of the car may be more limited. Or, as seems very possible, Tesla supplier CATL has improved the density of its cells. The absence of cobalt means the battery will be cheaper and a new investigation suggests that Lithium Iron Phosphate costs will fall well below $100 per kilowatt hour by 2023. The full battery cost for a 250mile/400km car will then be little more than the engine parts for a medium sized internal combustion engine car.
10, Capturing carbon from industrial processes. UK company Carbon8 has a process that combines solid waste materials with captured CO2 to make an aggregate that can be used in construction. It sold its first plant in summer 2020 to a French cement maker and this week announced a sale to a Netherlands 'Energy from Waste' facility. In this case Carbon8 will take the fly ash from the EfW plant and combine it with carbon dioxide from the waste combustion process. (The operator of the EfW process already collects 15% of the CO2 for use in local greenhouses). This is an important technology with a potentially wide application.
Thank you to those subscribers who bravely volunteered to test our new database for articles and references contained in this newsletter. I will be in touch in the next couple of weeks. I am really very grateful for the offers of assistance.
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